Diffusion of IFRS using innovation diffusion models

Abstract

Purpose This study aims to examine the diffusion pattern of International Financial Reporting Standards (IFRS) into the countries and identifies the channels of diffusion. Design/methodology/approach Data includes 98 countries that made a public commitment to IFRS adoption from 2000 to 2016. Adoptee countries are categorized based on Rogers’ adopter categorizations to understand country characteristics. Innovation diffusion models such as internal influence, external influence and bass diffusion that explain diffusion patterns are applied to the cumulative adoption of IFRS. Coefficients of internal and external diffusion are obtained using the models to explain the mode of diffusion pattern of IFRS. Further tests are done to identify the best model that explains IFRS diffusion. Findings Findings show that IFRS diffusion is a result of external influence through vertical communication from a centralized body (IASB) and internal influence due to imitation and interpersonal communication between countries. Imitation effect among the countries has a stronger effect on the IFRS adoption compared to the communication obtained from IASB. Practical implications Findings obtained can help standards-setting bodies, organizations and countries to understand the potential future of adopters and non-adopters. It facilitates the standard-setting bodies to manage IFRS diffusion by implementing measures to spread the word on the benefits of IFRS. Originality/value The study generates value by modeling a successive increase in the number of IFRS adoptee countries using empirical methods and identifies the reasons for the diffusion life cycle of IFRS.

The diffusion of innovation theory and the effects of IFRS adoption by multinational corporations on capital market performance: a cross‐countryanalysis

“…Very few studies have used the DOI theory to illustrate the relevant benefits or effects of IFRS adoption (Dayyala et al, 2020;El-Helaly et al, 2020;Elmghaamez, 2019). According to the DOI theory, adopters of innovations might experience desirable or undesirable outcomes, direct or indirect consequences, and expected or unexpected benefits due to the impact of their social factors This uncertainty of the outcomes could lead to either rejection or accepting such innovations (El-Helaly et al, 2020;Elmghaamez, Gerged, & Ntim, 2020;Oliveira & Santos, 2019;Rogers, 1995).…”

“…Theoretically, very few studies have employed the DOI theory, popularized by Rogers in 1962, to explain the global diffusion of IFRS (e.g., Dayyala, Zaidi, & Bagchi, 2020;El-Helaly et al, 2020;Elmghaamez, 2019). For instance, recent research conducted by El-Helaly et al (2020) employed DOI theory to explain how countrylevel control of corruption may hinder or expand IFRS adoption across non-European Union (EU) countries.…”

“…In contrast, it is positively associated with a country's mandatory adoption of IFRS. Furthermore, Dayyala et al (2020) explicitly researched the innovation diffusion models by investigating the internal, external, and mixed diffusion of IFRS to identify the best communication channels using DOI theory. Results of the study suggest that IFRS diffusion occurs due to a combination of external (mass media) and internal (social interaction) communication channels.…”

IAS/IFRS in Jordan: Adoption, Implementation and Determinants

“…Lack of IASB experts in Jordan ranked eighth with a mean of 3.1452. In this context, findings from Dayyala, Zaidi and Bagchi [76] revealed that collaboration among countries and IASB is one of the main factors that help in adopting and applying IFRS. Lack of active market in Jordan ranked ninth with a mean of 3.0968.…”

Please call my contact person: mobile devices for a rescue mission during an emergency

“…Inferring from the studies of Kleinaltenkamp et al (2012) and Vargo et al (2020) all the actors involved in MCP are resource integrators who cocreate phenomenologically while MCP diffusion is a critical part of the innovation processes. Besides, Dayyala et al (2020) integrates innovation diffusion models based on internal, external and bass diffusion and founds that International Financial Reporting Standards (IFRS) diffusion is possible through external influence with vertical communication, through internal influence in respect of imitation and interpersonal communication across the borders. This result also established the dynamism and inclusiveness of innovation diffusion.…”